Clarence Fanto | The Bottom line: Nonprofits that help those in need deserve our support, tax break or not
LENOX — Charitable organizations large and small that depend on the generosity of donors have been running scared over the effects of President Trump's tax reform law.
Instead of itemizing deductions, including contributions to nonprofits, an estimated 90 percent of taxpayers will claim the standard deduction, now nearly doubled to $12,000 for an individual (up from $6,350 last year) and $24,000 for a couple filing a joint return (compared to $13,000).
That means for folks entirely or partially motivated by the advantages of claiming tax deductions, there has been less incentive to make end-of-2018 charitable contributions.
The Urban-Brookings Tax Policy Center estimates that the new tax law will slash the number of households claiming an itemized deduction for their charitable gifts from about 37 million to about 16 million for tax filings by April 15, according to a CNBC report.
Nonprofits that rely on modest donations are being hit hardest, while organizations that cater to higher-income contributors can pitch the strategy of avoiding capital gains taxes on investment profits by donating stocks or other assets such as artworks that are more valuable than when purchased.
Even before the new tax law kicked in, household giving had been declining by more than 11 percent over the past 15 years, meaning greater dependence on sizable contributions from wealthy individuals, companies and well-funded foundations.
The total value of donations may decline by 5 percent this year, USA Today recently reported. The databank at Giving USA shows a total of $410 billion in nonprofit donations last year, but that could drop to $390 billion.
With gridlock on Capitol Hill bringing most meaningful legislation to a halt, prospects are dim for proposals introduced recently allowing tax filers to deduct donations to charities and other nonprofits even if they don't itemize their returns.
Berkshire County has 1,702 nonprofits, a report by the TaxExemptWorld website shows, with total assets of nearly $6.9 million and income of $2.2 million for the most recent tax filing year. The A-Z list, updated two months ago, is formidable, ranging from 1Berkshire Strategic Alliance (numerals come first) to Zonta International. If you download the file, you can check out the resources of all the organizations, based on IRS nonprofit tax filings and other sources.
The county is heavily dependent on charities, as the IRS classifies all organizations claiming nonprofit status, and that may help explain why many of us encountered traditional and electronic mailboxes flooded with appeals for donations last month.
Some people prioritize contributions to homeless shelters, food pantries and numerous other organizations that assist the thousands of less fortunate individuals and families in our midst. Others choose arts organizations, public radio or TV, churches, synagogues, scholarship funds — the choices are endless, and difficult.
Visitors to Berkshire County, especially from metro areas like New York and Boston, often assume this region is far more prosperous than it is. The reality is that median countywide family or household income, at $55,190, is well below statewide and national levels, except in a few small towns like Alford, Richmond, Washington and Tyringham, according to a U.S. Census Bureau report analyzed in The Eagle on Jan 1.
The median household income in 22 of Berkshire County's 32 cities and towns was below the state median of $74,167. North Adams, Pittsfield and Adams are at the bottom of the list, but Stockbridge, Great Barrington, Monterey and Dalton were surprisingly low on the ranking of 32 Berkshire communities.
Pockets of poverty are all around us, some well-hidden along rural backroads, others quite visible in our two cities and largest towns.
So, while it's tempting to feel frustrated at the seemingly constant quest for handouts, the challenge we face is figuring out whether to support the charities that benefit our less fortunate residents, or the informational and cultural stalwarts like WAMC Northeast Public Radio, New England Public Radio (WFCR), the BSO, Jacob's Pillow, our outstanding theater companies and world-class museums.
For those who can afford it, writing a check or supplying a credit or debit card number is relatively easy, tax deduction or not.
But the people I know who gather supplies for food pantries, show up to help feed, clothe and shelter the destitute and give our immigrant families a helping hand may be the real Good Samaritans, since they derive no personal benefit or reward beyond the realization they've made a difference that may be unheralded through a program-book donor listing or on-air acknowledgement, but far more meaningful.
After all, as Merriam Webster tells us, the first definition of charity is obvious but all too easily forgotten: Generosity and helpfulness especially toward the needy or suffering, and also, aid given to those in need.
Clarence Fanto can be reached at email@example.com. The opinions expressed do not necessarily reflect the views of The Berkshire Eagle.
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